UK late payment interest calculator
Your client is late. Work out the statutory interest and the fixed compensation you are entitled to under the Late Payment of Commercial Debts (Interest) Act 1998 — then copy a letter before action. Free, no sign-up.
Your overdue invoice
What you can claim
Compensation is per overdue invoice, banded on that invoice's own value: £40 under £1,000 · £70 from £1,000 to £9,999.99 · £100 at £10,000 and above. Three overdue £800 invoices claim 3 × £40 — not one £70.
Letter before action
Before you send this: because your client is an individual or sole trader, the Pre-Action Protocol for Debt Claims requires you to enclose its Information Sheet and Reply Form (Annex 1) and a Financial Statement form (Annex 2). Download the Protocol and its annexes. Sending the letter without them can get a later claim stayed.
Claims up to £10,000 go to the small claims track, where you can normally recover the court fee and fixed issue costs — but not the time you spent chasing.
This is an entitlement calculator, not legal advice, and we are not a law firm. Figures are the statutory amounts under the Late Payment of Commercial Debts (Interest) Act 1998 — confirm the current rate on GOV.UK, remember the six-year limitation period under section 5 of the Limitation Act 1980, and take advice before starting court action.
Worked examples
| Invoice | Days late | Interest | Compensation | Interest + compensation | Total now due |
|---|---|---|---|---|---|
| £2,000 | 30 | £19.32 | £70 | £89.32 | £2,089.32 |
| £5,000 | 60 | £96.58 | £70 | £166.58 | £5,166.58 |
| £12,000 | 90 | £347.67 | £100 | £447.67 | £12,447.67 |
At a statutory rate of 11.75% (debts running late in 2026). Interest is simple, calculated daily as amount × rate ÷ 365. "Interest + compensation" is what you add on top of the invoice; "Total now due" includes the invoice itself.
Questions freelancers ask
How much interest can I charge on a late invoice in the UK?
Under the Late Payment of Commercial Debts (Interest) Act 1998 you can charge statutory interest of 8% above the Bank of England base rate on a commercial debt. It is simple interest, not compound, and it runs automatically — you do not need a clause in your contract.
Which base rate do I use — today's?
No, and this is the mistake that costs freelancers money. The rate is 8% above the Bank of England base rate in force on the 30 June or 31 December immediately before your debt started running late, and it stays fixed for that debt. An invoice that went overdue in late 2025 carries 12.25%, while one going overdue now carries 11.75%. This calculator sets the rate from the due date you enter, and you can still edit it.
What is the £40, £70 and £100 late payment compensation?
On top of interest you can claim a fixed sum per overdue invoice: £40 for a debt under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. It is per invoice, not per client — three overdue invoices of £800 each entitle you to 3 × £40, not a single £70. Under section 5A(2A) you can also claim reasonable recovery costs above the fixed sum. The entitlement only arises once statutory interest starts to run.
Can my contract cancel the statutory interest?
A contract cannot simply remove the entitlement — any exclusion is void unless the contract provides a substantial remedy for late payment instead. The flip side matters too: if your own terms already set out a substantial late-payment remedy, that remedy replaces the statutory claim, including the fixed £40/£70/£100. Check your own contract before relying on this calculation.
When does an invoice legally become late?
If you agreed a payment period, the debt is late the day after it ends. If nothing was agreed, the statutory default is 30 days from the later of the customer receiving the invoice or receiving the goods or service. Between businesses a payment period longer than 60 days is only valid if it is not grossly unfair to the supplier. That 60-day rule is for business customers — if your client is a public authority such as a council, an NHS body or a government department, the payment period cannot exceed 30 days, so interest starts running sooner.
Can I claim this from a client who is a sole trader?
The Act covers commercial debts between businesses, which includes sole traders acting in the course of business. It does not cover a consumer buying for personal use. Note that before starting a court claim against an individual or sole trader, the Pre-Action Protocol for Debt Claims applies: you must enclose the Information Sheet, Reply Form and Financial Statement it requires, and allow 30 days for a reply.
Is there a deadline for claiming?
Yes. Under section 5 of the Limitation Act 1980, a claim founded on a simple contract must normally be brought within six years of the debt falling due. After that the debt is usually statute-barred and the court will not enforce it, so do not sit on an old invoice.
Does claiming interest mean going to court?
Usually not. Most freelancers reissue the invoice with the statutory interest added and the Act cited, which is often enough on its own. A letter before action is the next step, and a court claim is the last one. Note that claims up to £10,000 go to the small claims track, where recoverable costs are limited — you can normally recover the court fee and fixed issue costs, but not the hours you spent chasing.